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Basis of National Health Reform funding - Commonwealth

To meet the reporting requirements of section 240 of the National Health Reform Act 2011, the Administrator's monthly reports must include the amounts paid into and from each State Pool Account and State Managed Fund, the basis on which these payments were made, and the number of public hospital services funded.

In 2012-13 and 2013-14, Commonwealth National Health Reform (NHR) contributions to each state and territory were equivalent to the amount that would otherwise have been payable through the former National Healthcare Specific Purpose Payment (SPP). These years were known as the 'transition years'.

For 2014-15, 2015-16 and 2016-17, NHR funding is linked to the level of services delivered by public hospitals as provided under the National Health Reform Agreement (the Agreement). These years are known as the 'growth years'.

For financial years, 2017-18, 2018-19 and 2019-20, the Commonwealth will fund 45 per cent of the efficient growth of activity based services, subject to the growth in Commonwealth funding for public hospitals not exceeding 6.5 per cent a year, under the Addendum to the National Health Reform Agreement (the Addendum).

For the period 2020-21 to 2024-25, the Council of Australian Governments (COAG) Health Council has drafted the Heads of Agreement between the Commonwealth and the States and Territories on public hospital funding and health reform (the HoA). Within the framework of the HoA, a new NHR Agreement will be negotiated for the period 2020-21 to 2024-25.